Single Business Tax
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Pros & Cons of the SBT
Michigan adopted the Single Business Tax (SBT) in 1975. It is a value-added tax that replaced the corporate income tax and six other business taxes. This represents about 6% of all state revenue. Under current law, the SBT is scheduled to be completely phased-out by 2009. The rate is reduced by 0.1% each year. However, the phase-out has been paused for two years to allow the state budget to stabilize. (Detroitchamber.com). There are guidelines that they will have to follow if they decide to replace the SBT. Examples of this are: the governor and state legislature must agree, Small businesses under $350,000 in gross receipts should be exempt; the tax should go to the state, and many more.
PROS
SBT actually punishes companies for adding payroll and benefits.
Government can totally revamp taxes all together.
Businesses would be happier.
Maybe it would entice more businesses to come to Michigan if the replacement tax satisfied them.
New tax should be better for small businesses.
Could raise chances of people becoming reelected.
After 2009 there will be a plan for income for the government.
Employers may be more willing to hire more employees.
CONS
No one is sure where the money to replace this tax will come from.
New tax could be worse.
Decisions to raise taxes somewhere else, like property tax.
Could